Correlation Between Fresenius Medical and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both Fresenius Medical and Gamma Communications at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fresenius Medical and Gamma Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fresenius Medical Care and Gamma Communications PLC, you can compare the effects of market volatilities on Fresenius Medical and Gamma Communications and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fresenius Medical with a short position of Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fresenius Medical and Gamma Communications.
Diversification Opportunities for Fresenius Medical and Gamma Communications
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fresenius and Gamma is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Fresenius Medical Care and Gamma Communications PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications PLC and Fresenius Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fresenius Medical Care are associated (or correlated) with Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications PLC has no effect on the direction of Fresenius Medical i.e., Fresenius Medical and Gamma Communications go up and down completely randomly.
Pair Corralation between Fresenius Medical and Gamma Communications
Assuming the 90 days trading horizon Fresenius Medical Care is expected to generate 1.7 times more return on investment than Gamma Communications. However, Fresenius Medical is 1.7 times more volatile than Gamma Communications PLC. It trades about 0.22 of its potential returns per unit of risk. Gamma Communications PLC is currently generating about 0.08 per unit of risk. If you would invest 3,754 in Fresenius Medical Care on August 30, 2024 and sell it today you would earn a total of 395.00 from holding Fresenius Medical Care or generate 10.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fresenius Medical Care vs. Gamma Communications PLC
Performance |
| Timeline |
| Fresenius Medical Care |
| Gamma Communications PLC |
Fresenius Medical and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fresenius Medical and Gamma Communications
The main advantage of trading using opposite Fresenius Medical and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fresenius Medical position performs unexpectedly, Gamma Communications can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gamma Communications will offset losses from the drop in Gamma Communications' long position.| Fresenius Medical vs. Tungsten West PLC | Fresenius Medical vs. Argo Group Limited | Fresenius Medical vs. Hardide PLC | Fresenius Medical vs. Versarien PLC |
| Gamma Communications vs. CVR Energy | Gamma Communications vs. Viridian Therapeutics | Gamma Communications vs. Dollar Tree | Gamma Communications vs. News Corp Cl |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |